Not yet a sovereign state, although it recently applied to become a permanent member of the UN, the Palestinian Territories still has a strong sense of national identity. It is an ancient civilization that spans millennia, which has been at the center of Middle East politics for almost 100 years, and continues to be a source of contention. Much of its problems stem from the conflict between the Palestinians and Israel, particularly rooted in the 1948 declaration of Israel as an independent state.

Palestine was a British Mandate between 1922-1948, and it was not until the early 1990s that it gained autonomy from the Israeli government. Its geographic composition is complex, with Gaza and the West Bank disconnected from each other within Israeli borders.

The fact that the two autonomous regions – they both have elected governments – are separated poses fundamental problems in terms of statehood. Today, Gaza is run by the Islamist movement Hamas and the West Bank by Fatah, the dominant faction of the Palestinian Liberation Organization (PLO). Although internal affairs are under the Palestinians own control, Israel has enforced a number of policies that makes it difficult for the people there to live a normal life. Gaza is subject to an economic blockade and the roughly 400.000 Israeli settlements in the West Bank – considered illegal under international law – have hindered progress towards a peace deal. The status of Jerusalem is another delicate issue that obstructs the route to a permanent peace settlement.

Hundreds of thousands of Palestinians have been replaced as a result of the conflict with the Israelis. Other Arab states have often sided with the Palestinians in their struggle against Israel, however, there are many examples of repression of the Palestinian people throughout the region – restrains on citizenship and travel restrictions are some of the difficult barriers they face.

Financial institutions have grown stronger during the past years, but the economies of both Gaza and the West Bank remain under heavy pressure from Israeli restrictions. Their combined GDP growth rate was 9% in 2010, but as much as one in four Palestinians are unemployed. Foreign aid is a pivotal source of income.